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CCH Axcess Tax

Aggregation Code

The aggregation code can be used in three different scenarios to aggregate rental entities and/or passthrough activities:

1. Passive activities

The aggregation code is used to designate the predominant "undertaking" for purposes of aggregating several activities into one when calculating Form 8582.

The predominant "undertaking" entity or activity should not have an aggregation code entered.

To aggregate a particular activity with the predominant "undertaking," enter the code representing the type of activity as a prefix immediately followed by the entity number of the rental property or the activity number of the passthrough which is the predominant "undertaking."

2. Materially participating real estate professional activities

In this scenario, the aggregation code is used to designate the group that should be aggregated into one when determining if the current year income or loss and the carryover loss should carry to the Form 8582.

All activities/entities in the group must be entered with classification code of "4" in the "Classification code".

Leave one activity/entity's aggregation code blank. This activity is considered to be the "main" activity or entity. It makes no difference which activity or entity is chosen to be the "main" one as all members of the group are treated the same.

In the aggregation code for the other members of the group, enter the code representing the type of activity as a prefix immediately followed by the activity number of the passthrough or entity number of the rental property which has been chosen to be the "main" activity or entity.

More than one materially participating real estate professional group can be entered. Each one must have a different "main" activity or entity.

3. Publicly Traded Partnerships

The aggregation code is used to designate the predominant "undertaking" for purposes of aggregating several activities into one when calculating the Publicly Traded Partnership worksheet.

The predominant "undertaking" activity should not have an aggregation code entered.

To aggregate a particular activity with the predominant "undertaking," enter "K" as a prefix immediately followed by the activity number of the passthrough which is the predominant "undertaking."

Aggregation General Information

Each group must have identical "TSJ," "FS," "ST," and "Classification Code" coding. An activity or entity, in the group, that has coding that deviates from that of the "main" activity or entity may cause the return to be incorrect. In situations where coding may need to be different, a second entity with a different or no aggregation code needs to be created.

The prefix codes are as follows:

For example, if partnership activity number 342 is the predominant "undertaking" or the "main" activity, the aggregation code should be entered as "K342."

Only passive activities and materially participating real estate professional activities can be aggregated. Other nonpassive activities cannot be aggregated.